Summary of Baird RFID Monthly for November

Baird has released its November report. The 19-page document is a worthwhile read for anyone requiring an overview of the industry's last 30 days. For those without time to do so, we have reprinted here the report's summary.

November 26, 2007—Wealth and asset management firm Robert W. Baird & Co. has released its RFID Monthly for November. Baird has given RFID Update permission to reprint the Key Developments section (below), which offers the report highlights. For those wanting more detail, the complete 19-page document is available free here.

The standard matrix of primary RFID providers is on page 13, and following are the Key Developments:

HF Version 2. We understand that silicon for the HF Version 2 protocol (similar to UHF Gen2 protocol) was successfully tested in Europe this past October. Apparently, both NXP and ST have working silicon. Our latest understanding is that the Hardware Action Group has approved the protocol, and reviews are currently underway. Our expectation is for the standard to be ratified by GS1/EPCglobal by January. We understand that ISO will look to publish a similar standard as ISO 18000-3, mode 3. Industry insiders suggest that the earliest publication by ISO will be mid- to late-2009.

Publicly Traded Companies Making Greater Mention of RFID. We mentioned last quarter that public companies are beginning to profile RFID more significantly on their conference calls, which we saw again this quarter. Avery Dennison, despite reducing investment in RFID, indicated that unit volumes have been +200% y/y and that RFID is expected to represent $50M in revenue for Avery in 2008. Intermec announced an impressive number of closed-loop opportunities, while Zebra is making substantial investments in building up its active RFID portfolio. We believe such discussion is indicative of small but improving market opportunities.

International RFID Continues with Good Progress. While many remain focused on Wal-Mart and US RFID efforts, we continue to hear that the European and Korean markets remain the strongest for supply chain, closed-loop, and consumer applications. Europe appears more comfortable with the technology given their history with smart card applications, and Korea enjoys government support, including subsidies. We understand that most of the major handset providers, which reside in Europe and Korea, are looking at ways to integrate near-field RFID (NFC) for consumer applications. Europe appears strong for apparel, aerospace, supply chain, and libraries.